China denies antitrust probe of Microsoft

China is set to pass the country's first antitrust law on August 1, but the …

Update

According to a report from the Associated Press (AP), China's State Intellectual Property Office has released a statement denying that Microsoft is under investigation, calling such accusations "seriously untrue." The bureau stated that it has never conducted a monopoly investigation aimed at a large enterprise, and currently has no plans to do so.

Original story

Chinese financial daily Shanghai Security News is reporting that government officials have launched an antitrust investigation into whether or not Microsoft possesses an illegal monopoly in the Chinese market. Such concerns are nothing new to the software giant, but as of publication, the Redmond-based company was unable to actually confirm to Ars whether or not it was indeed the target of formal inquiry.

According to the AFP's report (there is no English version of the Shanghai Security News story that I could find), China's newfound interest in monopolistic abuses comes just six weeks before a new antitrust law is set to take effect on August 1. Microsoft is not the only company under scrutiny, but the software manufacturer is a major target thanks to its simultaneous domination of the Chinese software industry and strong stance against software piracy.

One of the claims Chinese officials have levied against Microsoft is that the company's high prices (up to 7,000 yuan, or $1,015 for Microsoft Office + Windows) directly encourage piracy. Microsoft has consistently been a major proponent of stronger IP laws in China, and has offered its assistance in several counterfeiting crackdowns. Investigating Microsoft for alleged market abuse sends the company a message that the Chinese government is unwilling to act as an enforcement arm for Redmond's interests if those interests contradict those of the Chinese people.

Visibly going after Microsoft allows the country's regulators to position themselves as taking a stance against corruption whether their inquiry produces any negative findings or not. Microsoft, after all, is an exceptionally easy target. Not only does the software company dominates the OS and office productivity industries worldwide, but it has also been the target of other high-profile antitrust investigations, including one by the EU, and another launched by the United States itself.

When contacted for comment, a Microsoft spokesperson reaffirmed that the company was unaware of any investigation, but stated: "We fully support China's efforts to establish an environment conducive to promoting fair competition and we believe we are in compliance with Chinese law. We also believe efforts such as the AML (anti-monopoly law) will better safeguard interests and benefits of consumers, encourage innovation and enhance economic development."